NBA near deal with TV partners

The NBA is close to
wrapping up its negotiations with ABC/ESPN and Turner on a new eight-year media
deal and could announce the new package during the NBA Finals or soon
afterward, according to industry sources.

The deals are not
completed, but multiple executives close to the talks confirmed that the
partners have zeroed in on the framework of a comprehensive deal that has been
in the works for the better part of a year. At eight years, the agreement would
mark the longest television contract the NBA has ever signed.

The current deal with
ESPN/ABC and Turner expires at the end of next season, spanning six years. The
league’s previous two television deals with NBC were for four years.

The NBA’s talks with
ESPN/ABC and Turner have remained cordial throughout, and no other network has
emerged as a serious competitor to them. Turner has been an NBA media partner
for two decades.

Specifics on the rights fee
the league will receive are unclear, but sources said it will be higher than
the current deal’s $765 million annual average. The likelihood that the new
deal could bring in more money to the league would be significant in that it
shows that the biggest leagues in the U.S. still are commanding higher rights
fees. In the last couple of years, the NFL, MLB and NASCAR have worked out TV
deals that pay them more money. Of course, these deals are not strictly TV
deals anymore and include many digital media rights.

In addition, the new deal
would mark a coup for the NBA, which has seen ratings level off recently. The
length of the deal gives the league security while it continues to develop its
own channel and make its content available on multiple platforms.

For ESPN/ABC and Turner,
the deal guarantees multiple access points to branded sports programming that
is one of the more consistent ratings performers in sports.

NBA Commissioner David
Stern said negotiations are continuing, and that a new TV deal has not been
signed yet.

“All I can say is that it
remains our goal to try to have an agreement by the end of the Finals,” Stern
said.

ESPN and Turner officials
would not comment other than to say that the deal is not yet completed.

The NBA Finals begin on
Thursday in San Antonio, with the last date of the Finals set for June 21 if
the series goes seven games.

Specific contract details
are scarce, but the new deals guarantee ABC/ESPN and Turner a bouquet of
digital rights that will allow them to show game highlights via broadband,
mobile and video-on-demand, sources confirmed. International rights also are
included.

The TV partners also will
gain rights to stream their network games on their Web sites and via
video-on-demand soon after the games end. But streamed games will not be
available live, and will be archived only for a limited time.

The biggest holdup appears to be over an additional package of
digital rights that the NBA is making available that includes NBA.com and NBA
TV. Turner executives were in NBA offices last week talking about that package,
which would involve producing some aspect of those entities. One scenario being
discussed has Turner increasing its involvement in the management, programming
and operations of NBA TV, including sharing talent, infrastructure and
distribution leverage. Already, Turner’s parent company, Time Warner, holds a
small stake in NBA TV, and Turner operates a broadband channel, TNT Overtime,
on NBA.com.

It is expected Turner will
retain its exclusive NBA coverage on Thursday nights. As in the past, the
package is believed to include WNBA games, as well. No details on the NBA Development
League were available.

The amount of courtside signage inventory that will be given to
the networks on national broadcasts — as opposed to going to the local teams —
also wasn’t known.

The league would be left to
negotiate its out-of-market package, NBA League Pass, which is up for renewal.
The league has had talks with DirecTV and In Demand regarding that package.

HOLDING COURT

Looking at the NBA’s most recent television rights deals:

Year

Rights holder

Total rights fee

Avg. annual value

2002-2008

ABC/ESPN, Time Warner*

$2.4 billion

$400 million

2002-2008

TNT

$2.19 billion

$365 million

1998-2002

NBC, TNT/TBS

$2.64 billion

$660 million

1994-1998

NBC, TNT

$1.1 billion

$275 million

Source: SportsBusiness Journal archives

Note: The league has also had an agreement since 1994 with DirecTV and Dish Network for its NBA League Pass. The deals have been renewed several times although terms are unavailable.